Construction project billions 'still safe'

Gordon Brown has reassured the construction industry that hundreds of projects worth billions of pounds are still safe despite the effect of the credit crunch.

Positive: Gordon Brown said investment would not dry up

There has been growing speculation that this week's £50bn bail out of the banks will have to be paid for by cuts in money set aside to improve the country's schools, hospitals and roads.

But chairman of the CBI's Construction Council John McDonough has met officials from No10 and was told that schemes such as the £45bn Building Schools for the Future (BSF) project - which aims to revamp every single secondary school in England between now and 2020 - are safe.

McDonough - also chief executive of support services and construction firm Carillion, which bagged £1bn-worth of BSF work this year - said he was confident the Prime Minister would not pull the plug on improving the country's infrastructure.

'The government fully understands the importance of investing in the economy and they will do the right things for the country,' he said.

The City Academies programme has recently doubled in size to £4bn and McDonough said this showed education projects still topped Brown's spending list.

He also played down fears that lending worries among banks would hit major Public Finance Initiative projects such as those to build hospitals and prisons.

PFI schemes rely on private money for most of their equity but Mr McDonough pointed out they still had appeal, saying: 'Right now, if you're a bank where do you look? PFI is government debt guaranteed.'

Carillion, which bought rival support services firm Alfred McAlpine for £572m earlier this year, said business in the third quarter had met expectations. McDonough said workloads remained strong helped by a growing business in the Middle East.